Life/Term assurance - placing it in trust - help my head hurts!

edited 30 November -1 at 1:00AM in Insurance & Life Assurance
3 replies 807 views
brokthebadgerbrokthebadger Forumite
6 Posts
edited 30 November -1 at 1:00AM in Insurance & Life Assurance
Hi there,

Following Martins piece on the importance of term assurance I have the forms to sign up to £200k of cover with L&G through Cavendish Online - £14 a month over 17 years sounds good value to me. But I am a bit confused on the placing it in trust section. I want the payout to go to my wife in the first instance but if she cops it at the same time as me obviously I want the payout to go to our 2 children preferably without inheritance tax being due. So how do I achieve both aims? I presume that if I make my wife the current beneficiary and we both die at the same time the payout will pass to our estate, on which Inheritence Tax will be due unless we set up another wider trust that covers the whole estate. But if I just make our kids the current beneficiaries then my wife doesn't have direct control over the payout. Is the usual solution to make the kids the beneficiaries and my wife one of the three trustees? Any help unpicking this ramble is gratefully received!

Thanks

Brok

Replies

  • dunstonhdunstonh Forumite
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    Write it in trust to the children. Make sure you have the owner/life assured set correctly as well.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Hi Dunstonh,

    Thanks for your reply. Am I right about the logic of including my wife as one of the trustees? What control over the proceeds do trustees have? I want to make sure that even if the beneficiaries are our two children that my wife can access that money without undue complication on their/her behalf. Is it just the case that as long as the trustees agree they can decide fairly straightforwardly what happens to the money? e.g it could be invested but equally it might need to be used for immediate living expenses?
  • dunstonhdunstonh Forumite
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    your wife will be a trustee and the children's interests will be the same as your wife's (food, clothing, everyday housing expenditure etc). Obviously, I am only referring to the family element of the life cover. Mortgage and debt protection should just be simple joint life first death with no trust.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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